The average annual percentage rate (APR) interest that retail credit cards charge has hit a record high of 28.93%, up from 26.72% in 2022 and 24.35% in 2021, according to Bankrate’s annual retail cards study released Monday.

The average store-only credit card charges 30.24%, up from 28.22% last year. Co-branded credit cards charge 27.64%, up from 25.01%.

Furthermore, nearly half of the 107 cards that Bankrate surveyed — including Walgreens, Victoria’s Secret, T.J. Maxx and Kay Jewelers — charge interest rates higher than 30%.

By comparison, credit cards of all types charge an average 20.72% APR.

“We used to see 30% as the high end for retail credit card APRs,” says Ted Rossman, senior industry analyst at Bankrate.com. “In fact, 29.99% was an artificial barrier that few dared to cross — for psychological reasons, mostly.

“But the market has blown past that threshold, given the Fed’s aggressive series of interest rate hikes over the past year-and-a-half,” Rossman continues.

Essentially, he says, many major retail credit cards are charging customers interest they would only charge subprime borrowers.

Bankrate warns consumers to watch out for cards offering a 0% interest promotion. If a shopper doesn’t pay their entire balance by the end of that promotion, stores could charge them steep interest on any charges back to the date of purchase.

“If you ever carry a balance, a retail credit card probably isn’t the best choice for you,” Rossman explains. “If you finance a $1,000 purchase at the average retail card interest rate — 28.93% — and only make minimum payments, you’ll be in debt for 50 months and will owe $715 in interest.”

On the other hand, “some retail cards give as much as 5% cash back, which is probably better than you would get from a general-purpose credit card,” he adds.